You can deduct the business-use share of a car you use for work, not your personal driving. You choose either the IRS standard mileage rate, 72.5 cents per mile for January to June 2026 and 76 cents from July 1, 2026, or actual expenses such as gas, repairs, insurance and depreciation multiplied by your business-use percentage. A ProfitDrawer business mileage log records the business miles that support either method.
Standard mileage method: business miles x the IRS rate. Business parking fees and tolls are added on top. Most other car costs are covered by the rate.
Actual expense method: add up the year's car costs, such as gas, oil, tires, repairs, insurance, registration, licenses, and depreciation or lease payments, then multiply by the business share of miles.
Example (example numbers only): you drove 10,000 miles, 6,000 for business, so the business share is 60%. Actual costs of $5,000 give $5,000 x 60% = $3,000. Standard mileage for 6,000 miles all driven in the first half of 2026 gives 6,000 x $0.725 = $4,350.
Rules to know:
- For a car you own, you must choose the standard mileage rate in the first year you use the car for business if you want to use it at all. Later years can use either method.
- For a leased car, choosing the standard mileage rate means using it for the whole lease.
- The IRS suggests figuring the deduction both ways before you choose.
- Keep records: date, destination, business reason and miles for each trip. General information, not tax advice.
Source: IRS Tax Topic 510, Business use of car · Updated
Tools and spreadsheets for this
Related questions
All questions on ProfitDrawer Answers →
General information, not tax, legal or financial advice. Check the rules for your state and your situation.